[MRC-69] ATOM Interest Rate Parameter Update


The objective of this proposal is to decrease the slope_1 parameter of the ATOM market from 0.2 to 0.14. This parameter is related to the interest rate mechanism of the market. For a deeper understanding of how it works we recommend reading this proposal.


The reason we believe this adjustment is needed is that the Cosmos Hub recently reduced the maximum inflation rate parameter from 20 to 10%. As expected, this change has led to a decrease in the ATOM staking APR from ~20% to ~14%. Given this, we believe the current slope_1 parameter of 20% is too aggressive towards borrowers and could be hurting borrowing demand. This proposal aims to fix that imbalance.


We don’t foresee any additional new risks stemming from this update.


This is a signaling proposal, not an executable proposal.

The Mars smart contracts on the Osmosis and Neutron chains are currently controlled by the Builder Multisig address. If this proposal passes, the builders will utilize their multisig to make the necessary parameter changes.


Copyright and related rights waived via CC0.


This proposal is being made by Delphi Labs Ltd., a British Virgin Islands limited company. Delphi Labs engages in incubation, investment, research and development relevant to multiple ecosystems and protocols, including the Mars Protocol. Delphi Labs and certain of its service providers and equity holders own MARS tokens and have financial interests related to this proposal. Additionally, Delphi Labs is one of several entities associated with one another under the “Delphi Digital” brand. Delphi Digital’s associated entities and/or equityholders or service providers of such entities may hold MARS and may have financial interests related to this proposal. All such entities, service providers, equity holders and other related persons may also have financial interests in complementary or competing projects or ecosystems, entities or tokens, including Osmosis/OSMO, Neutron/NTRN and Cosmos/ATOM. These statements are intended to disclose relevant facts and to help identify potential conflicts of interest, and should not be misconstrued as a complete description of all relevant interests or conflicts of interests; nor should they be construed as a recommendation to purchase or acquire any token or security.

This proposal is also subject to and qualified by the Mars Disclaimers/Disclosures. Delphi Labs may lack access to all relevant facts or may have failed to give appropriate weighting to available facts. Delphi Labs is not making any representation, warranty or guarantee regarding the accuracy or completeness of the statements herein, and Delphi Labs shall have no liability in the event of losses or damages ensuing from approval or rejection or other handling of the proposal. Each user and voter should undertake their own research and make their own independent interpretation and analysis of all relevant facts and issues to arrive at their own personal determinations of how to vote on the proposal.

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As part of this implementation, optimal utilisation rate on Neutron Outpost ATOM market will be bumped from 0.7 to 0.8 to reflect the suggested optimal utilisation - which has already been set on the Osmosis Outpost ATOM market.